May 15

The best railroad infrastructure is built by private hands in the private sector.


Pictured above: the great entrepreneur James J. Hill


Days ago, a government Amtrak train derailed in Philadelphia, killing at least 8. Almost immediately, central planners and socialists began blaming (nonexistent) “infrastructure cuts” by fiscally conservative members of Congress. (That was before the evidence tended to indicate the engineer was traveling over 100 m.p.h.).

A great lesson regarding railroad infrastructure is found in the book “The Myth of the Robber Barons” by Burton Folsom. Folsom recounts the wretched, currupt history of government-subsidized transcontinental rail lines in the United States. The construction of the first transcontinental line–operated by the Union Pacific Railroad with incredible subsidies from the federal government–was accompanied by massive corruption, bribery, and ripoffs of labor. The same goes with the Northern Pacific line completed slightly later. Bankruptcy, insolvency, unpaid debts (especially debts to the workers who built the lines) were a major part of the story of the building of the first transcontinental lines–all of which were public/private partnerships.

“Oddly enough, though, one man did come along and did build a transcontinental through the Northwest. . . . with no federal aid.” “That man was James J. Hill, and his story tells us a lot about the larger problem of federal aid to railroads.” (Folsom, p. 25).

Hill built a transcontinental line across the most rugged sections of the American west: the Great Northern line which runs through the jagged peaks of the northern Cascades, the vast icy canyons near (what is now) Glacier National Park, and the forbidding barren plains of eastern Montana and North Dakota. The Great Northern railroad received NO MONEY WHATSOEVER from any government. James J. Hill paid for every acre and easement out of his own pocket.

Unlike the government-subsidized lines to the south (which were paid for on a “track-per-mile” basis by the government), the Great Northern line was built straight and true. “Hill built his railroad for durability and efficiency, not for scenery.” (p. 27). “[H]e didn’t skimp on quality materials. He believed that building functional and durable product saved money in the long run.” (p. 27).

By contrast, the government-subsidized UP and NP lines were “inefficient in gradients, curvature, length, quality of construction, repair costs, and use of fuel. This mean permanently high fixed costs for all passengers and freight using the subsidized transcontinentals.” (p. 31).